Need Help On Best Way To Prepare For A Global Macro Fund (Macro P.M. input wanted)

I am a student who is really interested in global macro and whose dream job would be to be at a global macro hedge fund in an investment analyst role and where I could have the potential to act in an idea generation capacity. I have looked online and found some stuff, but all the stuff I found was either old, about long-short hedge funds rather than macro funds, or both. Based off of what I have found, I get the impression that people don't get in straight from undergrad but rather are hired after already having experience in a related field. Investment banking was the most popular one I heard but it doesn't seem to be relevant for global macro, I also heard that for global macro they tend to hire people in trading and research. Is this accurate, and which groups are most relevant for a macro group? I'd imagine that stuff like rates is ideal, but it would be good to get input from someone actually in the industry. Also, what books do you recommend for self-education? I have already read the Alchemy of Finance, Soros on Soros, Financial Turmoil In Europe and the United States, The New Paradigm for Financial Markets, Merger Arbitrage, Dynamic Hedging, Hedge Fund Market Wizards, The Intelligent Investor, You Can Be A Stock Market Genius, One Up on Wall Street, and Hedge Fund Market Wizards. I am currently reading Global Macro Trading: Profiting in a New World Economy, Interest Rate Markets: A Practical Approach to Fixed Income, and Fixed Income Securities: Tools for Today's Markets. I am currently also running a small trading account with a trade journal where I make trades in a variety of asset classes based off of macro themes and expressed through etfs. Is there anything else you recomend I do or any advice you have? Your input is greatly appreciated.

EDIT: For Clarification, I am at Wharton in M&T. I currently have a 4.0 GPA and expect to graduate with a 3.8-3.9+ GPA (possibly 4.0, but some classes, particurly later on are really hard, so I doubt that I will maintain perfect grades, although I do my best).

Comments (14)

Best Response
May 4, 2017

I recommend reading more technical books about portfolio management and portfolio construction just to serve as a primer and help you understand the risk management side of the job (which is undertaught, imo).

When it comes to event driven or global macro, the focus is going to be on understanding themes occurring across the globe today and how that changes potential themes that could happen tomorrow. The most important step, imo, is comparing the differences between what you believe will happen with the current consensus. Find the lazy counterparties (see: fidelity's and vanguards of the world) and place your bets against them.

Here's an example: Brexit.

Basic investor: UK is negotiating with EU on Brexit terms. Assume no special treatment (no access to single market)--how does that impact UK GDP, import/export, who will be their trading partners, how does this impact the GBP, etc.?

These will be basic items you will need to know off the back of your hand, but does not elevate you to being "informed."

Informed investor: PM Theresa May called for general elections, which will give her another 5 yrs to work on Brexit & domestic policy. She's calling elections at a time when her rivals are weak, in an aim to increase the number of pro-brexit conservatives to help solidify her "hard brexit."

A hard brexit means an investor should expect that negotiations will be violent (EU demanding 100b, UK raging, etc.). Theresa May gave herself a 2 yr window (too ambitious) to negotiate deal, but if she consolidates support for a hard brexit talks, while unwilling to meet EU terms, it is unlikely she will get a deal (they are too far apart). What this means is to expect brexit negotiations to take longer than anticipated, which will erode her popular support leading up to 2022 elections. How does this understanding of the future differ from the basic understanding of the impact brexit will have on UK economy, gbp, etc? Well, if brexit drags on, investors will likely end up pricing that into the gbp, meaning that short term pressure on gbp might represent buying opportunities and that discounting brexit impact on consumer spending would be smart (while still including brexit uncertainty in business climate).

Macro PM: long gilt short bund

(this is purely an example lol)

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May 5, 2017

Thank you. I will be sure to check out that book and look at the reports and holdings of places like fidelity and vanguard to get a better idea of the consensus and compare my ideas with them. Thank you

Jun 17, 2017

I think it should be short gilt.

And buy German CPI swap.

May 5, 2017

What school do you go to? Letter-writing to alumni and offering to work for free might be your only chance.

You have less than 1/100 chance at macro out of school, unless you are at one of Bridgewater's targets since they hire new grads (and then you are very cog in the machine, nothing holistic) or have personal connections.

Fyi, macro is doing terrible YTD and is unlikely to expand unless performance improves (aka get your hand on the HSBC hedge fund report and only talk to funds that are winners about working for free or cheap for a summer internship).

I'll tell you the truth: without an In, it'll take several years. If you're willing to embark:

The best thing to do would be to get a sell side S&T seat on a rates desk of some kind, like Treasuries trading or Swaps, or perhaps cash FX, or swaptions/FX options. To do that these days, you'll need to be useful to the desk, which means skills in data science or CS, and math faculties, as well as market savvy.

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May 5, 2017

I have secured a summer internship at a small macro fund (4 people total not including myself, decent AUM for its headcount and good performance but it probbly won't matter as a freshman so much as the learning and work experience) where I will helping with research and analysis, focusing on emerging markets, primarily Latin American rates but also other related stuff in Latin America. I don't think language will be too big of an issue as some of the other more senior people don't necessarily speak Spanish or Portuguese, but I am fluent in Spanish, Portuguese, and French.(My parents are of Spanish and Portuguese culture and I lived in France before moving to the United States at a young age, so I started speaking Spanish, Portuguese, and French around the time I learned English. It's European Spanish and European Portuguese, not the Latin American version, but given that language skills were never mentioned and that any need to use my language skills would be purely for reading, of which there is little difference between European and Latin American.)

May 5, 2017

I am a freshman at a top 5 target school. I am in my school's M&T program (I don't want to say any names to preserve my identity but it is well regarded, rigorous, and prestigious enough to be competitive) with a dual major in econ at my college's business school and computer science at my college's engineering school. I am planning to do a concentration in finance and statistics (I have a lot of course overlap with stat though which would make stat not take as many additional classes as finance). I have a 3.8+ GPA (4.0 right now) and am currently in my schools' investment and trading group (in the global macro team), hedge fund club, finance club, and M&T club. Most of my extracurricular time is probably in the global macro team, with the others being primarily for networking. I absolutely have strong enough programming and quantitative background that I could do trading. I would just prefer to be in macro fund directly from undergrad as thats what I want to do, but if that's not possible, rates S&T would be a good option, especially as it has good exit ops into a macro fund as I seem to hear. My biggest concern is being pigeon-holed in sell side trading and market making. (especially in the current regulatory climate). If I were to be in a desk, rates/swaptions is very interesting to me and would probably be ideal. I've already looked at the reports and am aware of the performance. Given that there are three years until I graduate, the low correlation of macro with other asset classes, and that there are many funds that perform much better than average, I don't think macro will be dying anytime soon though.

May 5, 2017

Could've started your post by saying you go to Wharton and are in M&T, changes the nature of the recommendation.

May 5, 2017

Nice job at guessing my school, will probably add that to the topic.

Jun 27, 2017

Don't be afraid of multi asset teams at Asset Management companies as well. They generally invest in a similar way that macro funds do as long as the team manages some funds that are long/short and tactical. I think JPM, MS, GS all have groups like this

Jun 27, 2017
Jul 6, 2017

OP: shoot me a pm

Jul 6, 2017

I think the OP is broadly doing all the right things...

OP: Like @macro bruin suggests, if you have any specific questions, I'd be happy to answer them. PM me, if you so desire.

Jan 19, 2018

IMO, it isn't impossible to break into a macro shop straight out of undergrad. Certainly difficult no doubt, but not impossible. I got through one after undergrad, where I still am. Not stellar grades, and not a target place. So if you're from Wharton M&T track, then you can certainly think about it. Though you should take into consideration that my story was a tad bit different and entry route was unconventional, so take what I have to say with a pinch of salt.

First you have to ask yourself and be honest to yourself whether or not macro is really where you want to be. Because if it is, then all the other bits become easy. But remember that macro isn't really the glamour filled image that is shown to the outside world. From a psychological perspective, macro can be quite paradoxical, because there is a lot of cognitive dissonance in play in terms of how things are thought of, and how the world is approached. So if you're someone who's quite comfortable with thinking through ideas and exploring newer thoughts that really lie in the tail end of the distribution (what you would call to be a heretic), then macro might be for you. I have always been comfortable with this aspect, so it wasn't a problem. You need to be open to considering newer ideas and not reject them solely on the basis of dogmatic biases.

In terms of what books to read, along with all those, I would also add in reading personal accounts of traders, history books (try to imagine the environment and price movements say in an Egyptian market in Alexandria in the Mamluk period), and hunting for the few rare blogs where current and former macro traders still write. Whilst it might seem that the hedge fund business is extremely opaque to outsiders (which it is in many ways), there is still a great amount of resource available, but finding these takes some work and time.

Others might be more insightful in terms of what track to pursue at an IB as a backup option to maximize your macro break-in.

But the two most important bits I would add in, would be 1. be open to the possibility of working for free for the initial few months, and 2. seek a mentor. I can't stress how important these two are.

In current environment, where everyone trying to get into finance is looking for a very well paid internship and some might even be violently hostile to the idea of working for free, merely offering your labor for free for the first few months, already makes you more attractive, and the amount of learning you can get is simply massive.

And seeking a mentor goes without saying.

Happy hunting!

Jan 19, 2018